How far from the lights? Was there a time when the lights were off for a day or two? What's in the mix? Have you fertilized?

Josh

What pepper is that?

I'll say one thing, that thing looks leggy as heck. they need to be closer to the light.

Are there drain holes in those styro cups? If not, I am guessing you have standing water in the bottoms of the cups which will cause all kinds of problems and eventually kill the seedling.

Also, It looks like the seed leaves are stemmed below the soil line. Did you just recently transplant the little fella?
How often do you water? What kind of soil are you using? What is the lighting situation? What kind of fertilizers are you using?
Answer those questions and list any more information and you will get some better informed opinions.
But without knowing the answers, I would agree with Josh on it being light related. That seedling is looking really leggy and that will likely cause coloring issues as well.
Bruce

I think also : NOT ENOUGH LIGHT.

overwatering and cool ambient can also be a factor.